Yelp Reviews Used as Basis for Defamation

By Joel Nied, an attorney based in Virginia who focuses his practice on mergers and acquisitions, intellectual property, corporate and securities, as well as debt and equity financings.

When does a Yelp review become the basis for a defamation lawsuit? According to some business owners, the answer is as soon as a less-than-favorable review is posted. Last month, BuzzFeed News reported on a Manhattan dentist who is suing a patient over negative comments on Yelp. It is the dentist’s fifth lawsuit against former patients.

Yelp lawsuits, though, are nothing new. Four years ago, a Washington, D.C. contractor brought a $750,000 defamation suit against a Fairfax, Va. resident who had given the company a poor review. She had also alleged criminal behavior.

In 2012, a Beverly Hills dentist sued a couple for posting a bad review in which they called the dentists a ‘butcher and crook’ on Yelp.

And in 2008, a company took action against a Utah husband and wife in the amount of $3,500 because of a poor online review. In that case, the company alleged that the posting had violated the terms-of-use agreement on the company’s website.

Increasingly, businesses are taking action, not against site publishers like Yelp and Angie’s List who are protected, but against individual users. The results of a single negative review can be costly for both parties. Business owners claim loss of income, and users may have to seek legal representation or pay expensive settlements.

Defamation suits are not always cut and dry, because laws vary from state to state and among jurisdictions. In D.C., defamation cases are examined by courts for a variety of factors that could influence a verdict. A plaintiff must show negligence on the part of the defendant and demonstrate that the defendant did not act with reasonable care.

In the case of a Yelp posting, did the reviewer do everything possible to ensure that the statements were true? In addition, in most cases in D.C. and surrounding states, a plaintiff also will have to prove that the defendant acted with actual malice if he makes false allegations that are defamatory in nature.

Actual malice means that the reviewer knows that the statements in a post are false; or that the reviewer acted with reckless disregard for the posting’s truth or falsity. Emotionally-motivated posts are good candidates for either prong of the actual malice test. The key is, if a reviewer states a fact – like “I waited an hour without service” – she has an obligation to make sure that it is not exaggerated, false, or otherwise manipulated. Like any controversy settled in court, facts must be able to be verified through documentation, witnesses, or other evidence.

A good practice, therefore, is to let the controversy – and emotion – settle before hitting the post button. As is the case with all legal issues, the disagreement between reviewer and business owner will ultimately be decided on the provable facts. While an issue may upset a customer, only factual claims that can support the review will be of value in defending a defamation suit. Conversely, a business owner angry at a poor review will likely be unsuccessful trying to sue over a clear error that the customer has documented.

The growing use of the legal system to defend against reviews posted on Yelp, Angie’s List, or other prominent consumer-driven services has changed the face of business. The old adage of “the customer is always right” is no longer of any concern when businesses strike back with vengeance for a less-than-flattering review. However, sometimes striking back in court may itself be the worst and most damaging publicity of all.

On the other side of the coin, a scathing review on Yelp may feel cathartic and gain the poster a few seconds of recognizable fame. However, more than a poor review, in the end, the power of walking away from bad business is the most powerful statement of all. And it is a choice you cannot be sued for.